Prime Minister Tony Abbott has not denied Australia paid people smugglers to turn around an asylum seeker boat.

The Prime Minister also refused to offer a view about whether such a method would be unacceptable and would not commit to an investigation.

Fairfax Media this week revealed passengers and an Indonesian police chief have claimed border protection officials paid people smugglers to return asylum seekers interecepted north of Australia en route to New Zealand.

Indonesia is now investigating claims that crew members of a boat were paid $5000 each to turn around.

The Indonesia government is not happy about this, and with good reason: quite apart from Australia dumping its problems on its poorer neighbour, it also establishes another lucrative business model for people smugglers.

Meanwhile, it might be worth asking Key how much he knew about this, and whether New Zealand contributed to the payments. After all, bribery seems to be its means of doing business at the moment...